Penn State, other universities pushed to drop fossil fuel investments

Old Main is seen on the State College campus of Penn State University. A group is pushing the state owned institution to rid itself of fossil fuel investments.

Old Main is seen on the State College campus of Penn State University. A group is pushing the state owned institution to rid itself of fossil fuel investments. (COURTESY OF PENN STATE / COURTESY OF PENN STATE)

Lori FalceOf The Centre Daily Times (TNS)

Fossil Free PSU wants to see Penn State clean up its investments

In a world with global warming, finite fuel sources and a renewed focus on clean sources of energy, one hot spot of protest on college campuses is becoming a push to clean up university money.

At Penn State, the driving force is Fossil Free PSU, a year-old campus organization that wants to see the university divest itself of any fossil fuel-related investments.

It's a movement that is gaining ground elsewhere.

In recent weeks, the University of Maine and Chalmers University of Technology in Sweden have announced divestment plans. In Massachusetts, the Harvard Climate Justice Coalition is suing the university to push for immediate divestment.

That's the kind of thing that can make a major institution nervous. The Chalmers divestment was just $5 million.

According to Penn State spokesman Reidar Jensen, the university's "long-term investment pool" holdings as of Dec. 31 stood at $3.4 billion, with $2.3 billion in endowed funds and $1.1 billion in nonendowed, all in a complicated web.

"Investments are made in accordance with Penn State's endowment spending and investment policies, as adopted by the board of trustees," Jensen wrote in an email. "The policy directs that LTIP funds 'should be invested primarily by independent investment managers selected by the (Penn State) Investment Council.' So, in accordance with policy, the funds are invested by outside professional money managers who are selected and closely monitored by the Office of Investment Management, with direct oversight by the Penn State Investment Council and the board of trustees. Investments are placed by third-party money managers into diversified, mutual-style funds composed of thousands of distinct holdings. Penn State is one of many institutional investors in such funds and the university does not have the independent ability to dictate what individual assets are purchased or sold by fund managers."

But Fossil Free PSU says it isn't asking the university to turn its policy on a dime. Spokesman Nathan Larkin said that is part of the misunderstanding of the movement. Instead, the group is asking for a start by freezing new investments in fossil fuels, and then asking Penn State to take five years to divest of other coal, gas, oil and related investments.

Larkin says they have hope because President Eric Barron, who comes from an earth and mineral sciences background, has not shown opposition.

"He has worked with NASA and NOAA. He understands the risk of climate change and the rate at which climate change is accelerating," he said.

But a university policy complicates things: "The (Penn State) Investment Council shall be guided solely by fiduciary principles. The council shall consider only financial criteria in formulating investment policies or in proxy voting unless specifically directed to do otherwise in a definitive manner by the board of trustees."

Larkin has an answer for that, too.

"It's not only a moral obligation. It's a financial one," he said, adding that a "growing body of research" suggests that investing in more green companies is showing at least comparable returns, if not higher ones.

It's a difficult balance for the university, which juggles the responsibility to students, faculty, alumni, donors and the state to do the most it can with its money. At the same time, the school is at the forefront of science dealing with climate change, shown in research and awards, like glaciologist Richard Alley, who shares in the Nobel Peace Prize for his work on the topic.

"Like other large, complex research institutions, we are constantly striving to find a responsible balance between our environmental stewardship obligations and our equally clear need to invest our financial resources according to recognized fiduciary principles. The administration will continue to work with the board of trustees to assure that this responsible balance of social and financial obligations is maintained," Jensen said.

Meanwhile, Fossil Free PSU continues to push for greener money at Penn State, garnering support from other campus organizations, such as Eco-Action, the Penn State College Democrats and the Community Environment and Development Club.

Eventually, they hope to bring enough support together to get the endorsement of the University Park Undergraduate Association.

"That will certainly grab the attention of the board of trustees," Larkin said.